How Uber And Lyft Are Losing The Race To The Electric Future

(Bloomberg) --

That gaping need dwarfs the comparably tiny amounts promised by the ride-hailing companies.

The pressure on the ride-hailing industry has escalated in recent years, with mounting evidence that these companies create surprisingly outsized environmental impacts. Researchers from the University of California, Davis, found that about half of all ride-hailing trips fit into two climate-damaging categories: displacing cleaner forms of transport, such as public transit, walking or biking; or encouraging car trips that otherwise wouldn’t have happened at all. Meanwhile, ride-hailing drivers spend about 40% of their time motoring without passengers, adding to the industry’s pollution.

If anything, though, Uber’s commitment has sputtered just when it needs a boost. For the past two years, Uber’s most ambitious EV incentive program has been in London, where the ride-hailing giant vowed to transition all of its cars to electric vehicles by 2025.

To encourage this change, Uber began helping drivers save up for an EV. The company created its so-called Clean Air Plan, which initially charged all London riders an additional 15 pence (21 cents) for each mile. The funds went into an Uber-controlled account for the drivers, who could then put the accumulated money toward the cost of an electric car. Uber estimated a full-time driver would accumulate 4,000 pounds ($5,500) in just a couple of years. Uber said the program has raised 135 million pounds to help its drivers get into electric cars.

This additional cash came on top of a nudge from London regulators, who exempt electric vehicles from two hefty tolls charged to drivers entering the city’s center, saving them 27.5 pounds per day. The dual incentives appear to be having an impact. Uber said 1,600 of its 50,000 vehicles in London are now electric, more than twice its total from a year ago. While that increase is noteworthy, it badly trails Uber’s initial interim goal of putting 20,000 electric vehicles on London’s streets by this year.

Instead of ratcheting up its incentive even further, Uber has done the exact opposite. On May 4, the company slashed its London EV incentive by 80%, to just 3 pence per mile. In a press release, the company said it would now focus on helping its drivers use their accumulated funds to purchase an EV, but it didn’t explain its reasons for gutting the incentive.

Tom Millen, who bought an electric van last fall to drive for Uber in London, estimates the change will cut his pay by 70 pounds per week. "The 15 pence doesn't even come out of their pocket, so it's pointless why they dropped it," he said.

Even some Wall Street analysts believe the company could be far more aggressive, increasing EV bonuses 

For more articles like this, please visit us at bloomberg.com

©2021 Bloomberg L.P.